INVESTMENT BANKS

Saudi Arabia 2017 | FINANCE | FORUM

Whether through asset diversification, a creative range of sharia-compliant products, or elegantly simple new sukuk restructurings, investment banks in Saudi Arabia are ensuring there is prosperity beyond the barrel, one riyal at a time.

ALHASSAN GOUSSOUS

CEO

Albilad Capital

Albilad Bank is one of the youngest banks in Saudi Arabia. Something that we like to stress is that we have the strictest sharia board, which often means we miss out on business. We are also launching the first sharia-compliant custody business in Saudi Arabia. This will help us, particularly in Malaysia, Indonesia, and Brunei. Some of the Islamic funds in the UK that want to access Saudi Arabia require a sharia-compliant custodian; that is becoming one of the main growth areas for us. It is going to become a competitive area in Saudi Arabia because the regulations are going to split the role of the fund manager from that of the custodian. That is the main business, and with Vision 2030, we are excited because we believe a large amount of business will come to investment banks, privatizations, and a focus on more institutional business, turning family companies into proper corporations and listing them on the primary and secondary market (NOMU) being set up.

HESHAM HUSSAIN ABOU JAMEE

CEO

Alistithmar Capital

Alistithmar Capital offers wide-ranging investment products and services to individuals as well as institutional clients. We have a state-of-the-art online trading platform and well-trained brokers for local and international brokerage services. We also offer conventional and sharia-compliant margin facilities to increase clients' purchasing power. Our asset management team is dedicated to delivering returns above client expectations and offering innovative solutions in many asset classes, like equity, fixed income, money market, and real estate with different strategies in different markets. We offer mutual funds, discretionary portfolios, and customized investment products. Our talented corporate finance team works to manage IPOs, rights issues, issuance underwriting, mergers and acquisitions, and sukuk and bond issuances. We help our clients clarify their needs and financial goals, create investment strategies, and build diversified portfolios. In short, for an investor, we have become an all-inclusive financial services company with appealing products for all types and classes of investors.

HASAN S. AL JABRI

CEO

SEDCO Capital

The past two to three years have been interesting. Since 2015-2016, we have been focused on Saudi real estate and been able to conclude solid investments, mainly in defensive income generating real estate. They end up making about 7% in net returns annually; therefore, it is a solid product with a good yield, which is one way our clients are able to diversify. In the future, we see that this will be a promising line of business as well. New regulations within the Capital Market Authority will encourage and induce more investments into income-generating Saudi real estate through the real estate investment trusts that has just been announced. This will be an area of great interest to the real estate industry and to investors because it provides them diversification and access, especially for medium- and smaller-sized investors. This will continue to be a very interesting area for us from that angle.

AMMAR ALKHUDAIRY

Chairman

Amwal Al Khaleej

We focus on two things: growth areas and existing management that we can rely on to drive that growth. The term growth sectors has different meanings in different economies. In Saudi Arabia, it could be demographic, retail, and consumer, while in the UAE oilfield services have been good for us. Typically, finding management talent has been a challenge in the region. We like to make investments in companies where management is well established. We have been targeting the middle segment, family-owned businesses. In some cases, even though the company is family-owned, the management will have been separated from family ownership for some time now. Those are even more attractive. Our growth changes with time. In the mid to late 2000s, the building materials sector was hot and experienced attractive growth. Today, though, we would not invest there because there was a super-cycle, and we did a lot of construction in Saudi Arabia for both infrastructure and superstructure.

SULIMAN AZZABIN

CEO

Deutsche Gulf Finance

The company was established in 2010 as a real estate mortgage financing company. In 2012, the Saudi Arabian Monetary Authority (SAMA) established new mortgage laws, which were exactly what the industry required and were perfectly suited in terms of regulating the market. Our focus from the onset has been on real estate, mainly mortgages for residential. We additionally do commercial lending, which also covers loans for business and commercial purposes, though residential mortgages are our core line. One of the main challenges that we face is competition from banks as the cost of borrowing for us is higher and we therefore cannot truly compete for high-end clients as they typically fulfill all the conditions, such as earnings, with banks. Instead, we actively target the middle and lower segments of society, in particular first-time buyers. They are the true beneficiaries of SAMA's regulation shift, and with the huge demand for housing in the country, are an ideal segment to tap into. Our portfolio today is a mix between different segments from a wide range of income backgrounds.

MOHAMMAD BIN DAWOOD

CEO

Rajhi Invest

Around 95% of our portfolio is in Saudi Arabia, so you could say we eat, breathe, and talk of Saudi alone. This country has the basic formula for success, with a young generation and many infrastructure projects committed by the government. We are investing heavily in the housing sector through our development projects. We have 2 million sqm of land in the Al Qassim region, which will be brought to the residential market in two months' time. We also have substantial investment. In Mecca, we have projects where we buy the land, construct, and begin to generate rent upon completion. In partnership with major developers in Saudi, we also own a couple of strip malls. About 8% of our portfolio is allocated to hospitality. We are heavily investing in the industry sector, so around 30% of our portfolio is in industry. Since the beginning of the year, we have been implementing a strategy approved by the board and in each sector we have set a target objective with geographical presence and investment criteria.

ADNAN M. TALMISANY

Managing Director

Alawwal Capital

We still have a young generation and around 50-60% of the population still needs new houses. The market is still under regulation, and we had mortgages law approved less than two years ago. The land tax was implemented last year and the end user financing instruments are still being developed. We still do not have a mortgage finance sector with all its products. This will take some time to fully develop, but the basic rule of demand and supply will offset any obstacles, as there is a huge demand growth in this country. The market will be regulated of course, and when government sets new policies and procedures, the market adjusts to absorb all the implications. However, this does not change the fact that the percentage of people in Saudi owning houses is one of the lowest in the region. Real estate prices are still reasonable compared to the region, so there are ample of opportunities.

KHALID AL-MUAMMAR

CEO

Alawwal Invest

Brokerage is always going to be there, but we believe the focus this year will be primarily on offering new products of asset management as well as investment banking, especially on M&A transactions. M&A business has been obviously impacted and both buyers and sellers were reluctant to transact for the past two years. We are seeing now that the appetite is coming back in the market as well. People are accepting new realities and new evaluations more than before. We will see more M&A transactions in the next year. Obviously this is highly related to the oil revenues. Since the agreement that was reached late last year we have seen that the oil prices have been quite resilient. If this continues, it will be welcome news to the Saudi economy. We are far from the breakeven point, which we think is about USD77 a barrel. It will be a challenging year for the retail sector because the bulk of the buying power will be gone. The annual results of some of the large retailers were better than expectations, so hopefully the impact will not be as severe as we anticipated earlier.

INVESTMENT BANKS

Saudi Arabia 2017 | FINANCE | FORUM

INVESTMENT BANKS

Whether through asset diversification, a creative range of sharia-compliant products, or elegantly simple new sukuk restructurings, investment banks in Saudi Arabia are ensuring there is prosperity beyond the barrel, one riyal at a time.

INVESTMENT BANKS

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INVESTMENT BANKS

Whether through asset diversification, a creative range of sharia-compliant products, or elegantly simple new sukuk restructurings, investment banks in Saudi Arabia are ensuring there is prosperity beyond the barrel, one riyal at a time.

INVESTMENT BANKS

TABLE OF CONTENTS

SEE ALSO

Saudi Arabia

FINANCE Vip Interview

Fast-tracking Innovation

Saudi Arabia

FINANCE Vip Interview

Beyond Common Practice

No more articles to show.

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